News for hackers. Stuff that matters.

A comment on The Era of Very Low Inflation and Interest Rates May Be Near an End. Parent comment

Re:The Era of Very Low Inflation and Interest Rates May Be N... by lotsofpulp on Thursday April 26, 2018 @08:27PM (#16937395)
If the interest rate goes down, you can just refinance. The fixed rate protects you from upward movement, and being able to refinance protects you from downward movement. What am I missing?
[ Parent | on HN ]
Re:The Era of Very Low Inflation and Interest Rates May Be N... by fatbird on Thursday April 26, 2018 @11:45PM (#16938321)
There are fees and process time to refinancing that acts as a disincentive to do so; and for several decades the fixed rate (by design) has been higher than what the variable rate incurs over the term (at least in Canada, where the term and the amortization period aren't the same).
[ Parent | on HN ]
Re:The Era of Very Low Inflation and Interest Rates May Be N... by kazinator on Thursday April 26, 2018 @10:45PM (#16938096)
Only that: TANSTAAFL.

Also: variable mortgages can also convert to fixed. If the rate is sitting flat, you're better off variable, with the option to switch to fixed if it looks like it will climb, than vice versa.

[ Parent | on HN ]